IamA founder of Tindie, "Etsy for Tech". Started on /r/Arduino, team of 5, just finished fundraising (pitching 50+ investors), and have now closed $1m+ in funding. This is a follow up to last year's AMA, for anyone interested in startups/tech/Sili...

About this time last year, Tindie was a few months old. I quit my job, incorporated the business around the site (which was meant to be a hobby), and had just brought on our first hire. The AMA I did then was really popular with great questions, so I figured I'd do a followup since a lot has changed!

What is Tindie?:

We are building a marketplace for indie hardware companies - from Arduino, Raspberry Pi, 3D printing, drones, you name it!

I looked at Tindie and my first thought was "there's a lot of neat stuff on here." But then I started poking around and realized that there's more than a small barrier to entry to actually using much of the neat stuff on the site since a lot of it seems to bits and pieces. In some cases, you'd have to actually string a number of the things together to make them actually "useful." This is unlike much of the what I understand people use Etsy for.

100% true & YES. There is a bit of a barrier to entry right now. Part of the features we will be rolling out in the new year will be to lower that barrier - help people get an idea what they can do with a part and make things much more approachable.

Haha we don't have the equivalent of Regretsy but if it emerged that would be brilliant

One way to do this could be the way amazon shows purchases frequently made together with a certain object. And like them you could offer deals that make it cheaper to buy a couple of those parts together.

Since you're currently working on making it a bit more 'entry friendly', do you mind a little suggestion? :-)

Those of us who are interested in introducing our kids/students to tech and engineering would love an 'educators' type section with kits like this: https://www.tindie.com/products/PartFusion/i-can-solder-badge-v1/ or even just parts lists and instructions that we can teach in our scout troops or homeschool groups, that type of thing. That would seriously be a fantastic resource and will probably drive a lot of customers your way.

Great questions - as a maker, our rates are lower than Amazon - flat 5% of the order. We also reach a core audience of people like you, which tends to mean you'll sell more on Tindie vs Amazon. As an example, one seller sold exclusively on Amazon, opened a Tindie store, and we began out selling Amazon. He closed his Amazon store and now sells exclusively on Tindie.

As a buyer, you are joining a community of likeminded people from all over the world and in different niches. Some like audio, some drones, others lighting. In the new year we are launching more features to build out the community side of the site. We are a community marketplace - community comes first. We can do a better job on the community side, and those features are currently being built.

As an example, one seller sold exclusively on Amazon, opened a Tindie store, and we began out selling Amazon. He closed his Amazon store and now sells exclusively on Tindie.

I usually find these things hard to believe. Why on earth would someone close their other account? It's still bringing in orders and subsequently more revenue. It makes no sense to sell exclusively on one platform.

I have a hard time understanding the people side of startups. Where and how do you really start meeting creative, productive, passionate people and how do you get the message across that you're one of them.

Do you mean about finding cofounders/employees/investors? I guess it depends which you are looking for.

The best way to meet people, I've found, is through people you already know. Your network. Generally speaking they are similar to your friends and you'll have a much higher chance of getting along with them.

I have a desire to learn a programming language and have messed around with python and java on codeacademy. What would you recommend as the next step? Books? More beginner tutorials? Poking around on github?

Sounds like you are now at the crossroad where people either keep going, or 'never have the time.' When I started, I'd get the occasional comment online, 'You'll never figure it out.' It's a pretty accurate statement for most. Most don't figure it out. If you can put your head down and just grit it out, you'll get to the other side.

If you want to grit it out, start with Learn Python the Hard Way. Then figure out a project you want to build and go build it. You'll pick things up as you go. You'll think you have it about 10 times before you really have a solid understanding. There were many times I'd talk to my friends and say "Oh I figured it out." I was wrong 10 times :)

It took 1 year to get to n00b level. The next year is when things settle in. After 2 years, you'll have a solid foundation to keep honing your skills. You won't know everything, but you can hack together projects, & figure things out.

Good luck!

Also checkout Stackoverflow. Learning how to properly break down my problems into questions was a great exercise. It helped me understand what the real problem is vs what I thought it was.

I did - my first job after learning how to code was as a developer advocate. Not 'coding' but putting what I learned to good use. That company was acquired, and I eventually became a web engineer at the company which acquired us. That was my last job before starting Tindie

What sort of things did you do for market validation? Did you have personal experience with this type of thing, people you knew who needed something like this, or some other type of research?

Also, how do you go about estimating market potential? I realize it's probably pretty difficult to do, but I would imagine it's also something investors/VC folks would be very interested in. I'm mostly just wondering if you make an educated guess, or if you have more concrete ways of quantifying the opportunity.

Good question - the only market validation I did was ask the question on /r/Arduino. There wasn't a marketplace for this type of hardware (we are still the only "big" site doing what we are doing). The space is emerging now.

You are right. The big question I got from investors is actually - 'How big is the market?' Unfortunately there isn't a good answer for that bc the market is growing / being defined now. Arduino/Raspberry Pi/Drones/3D printers are all just getting started and all growing like weeds. If those platforms become as big as we think they will, then a site like Tindie will have to emerge.

The one thing we look at is the components market is a massive, multibillion dollar market. The type of components that are on Tindie, generally speaking, first come to market on Tindie. The market potential is entirely untapped. However having orders from gov't agencies & large businesses is very reassuring that there is a much greater opportunity than just hobbyists (which is what most people thing on first glance).

I'm a student pursuing a bachelor of computer science, and I run a technology and fashion blog in my spare time. I have two questions:
1. What can I, as a blogger, do to help cool startups and/or find ones to feature?
2. What advice do you have for me as a student?

Very cool! Getting press / outside attention is very difficult (if you don't pay for PR - we don't pay for PR). Write blog posts, like to those sites. The link love will go a long way (over time). Most of the companies that you read about on TechCrunch, PandoDaily, etc are paying for PR which is why they get listed on all of those blogs and have stories come out at the same time (embargoes).

As a student, build something! Just keep building things. You have some free time - take full advantage of it. Also meet your peers. Build a network of other students in your class. Some will go to Google, Twitter, the next Google, the next Twitter. Increase your chances of doing well by meeting as many super smart people as you can. Build projects with them. Just make things and learn from experience.

I'm also a CS student and for the longest time I've been interested in Arduino. How did you get started tinkering and where would you recommend someone such as myself begin so as to eventually purchase from your website?

Definitely - 100% worthwile. I had saved up enough to live for a year without a paycheck (without healthcare...not smart but I did it). If you are interested, go for it. While you still have a job start learning HTML, CSS, some basic things. Give yourself some sort of foundation before taking the plunge. After a year won't be able to get a job as an engineer, but it will definitely help in the long run. I have never regretted that decision.

Any recommendations on resources to learn HTML and CSS? I have some programming skills (C, assembly, VHDL) and found the code academy stuff to be too slow and had a hard time seeing how to really apply it.

Sure ... For example, I would like someone more skilled than I to craft wireless sensors for my washer and dryer. They would sense when the machines are "done" and send a wireless notification so I would know when to switch loads.

So the thought would be ... I post the idea and accept bids for the work. Something like taskrabbit for the maker folks.

On Etsy, it's possible to message people and ask them if they'll take a special request. Some will, and they'll post a special listing just for one person. The person pays for it that way, using paypal, before it's ever made. I have done this a couple of times on Etsy and have had great success. If that's not possible on your website, I would suggest you consider taking the steps to make it possible!

What's the most frequent challenge you saw when working across various start-ups in the Valley?

What words of wisdom do you have for someone wanting to create their own start-up?

Lastly, as a CEO of a promising start-up, how do you think you would react if a complete outsider to your business cold-called/mailed your company with a potentially, feasible and lucrative idea? (Unfortunately, I don't have a great idea for Tindie, but am asking this question to see how a start-up CEO feels about cold-calling in general).

Biggest Challenge as CEO - Communication, balancing expectations, keeping everyone on the same page from users, employees to investors. You'll constantly hear, "Did you see X?" when someone thinks it is a competitor. Chances are it isn't and they have their own idea of what the business is which is different than your own.

Wisdom to start a startup - If it is a tech startup, one of your cofounders must be technical. Either yourself or your cofounder. If you can't build the first version/ a proof of concept yourself, start there. If you aren't technical, and don't know anyone technical, learn. In the valley you hear, "I'm looking for a techincal cofounder." so many times its crazy. You either already know someone (a good friend usually) or you don't. Trust me , you won't 'find' a techincal cofounder.

Coldcalled me - If someone cold called me with an idea, I'd ignore it. If they are serious, they will find a way to get an intro from someone close to me who can vouch for them. You'd be shocked how many random emails I get with businesses proposals.

What were the initial steps you went through at the beginning of your startup? From idea, to deciding to develop, to getting a group together to develop, to getting funding (and the other steps in-between). I feel like startups seem to magically appear out of nowhere, would love some insight from a real world example!

Was playing with hardware, saw people posting interesting projects and realized there will be products to emerge off Arduino/Raspberry Pi - like 3D printers, quadcopters, door locks that open with your phone, etc. New hardware products were coming

Thought well I could build a smart lock -but chances are tons of other people are doing that too. Will mine be the smart lock to win? Probably not (if tons launch).

Why not be the place where people get market traction? There will be tons of businesses that emerge and their names won't all be Nest- there will be small companies that pop up that build interesting products and just need visibility -> therefore marketplace

Asked the question in the Arduino subreddit if this was a legitimate idea (no code written at this point)

Initial answers positive so started writing the code for the site, getting a domain, name.

Launched site with a sign up form "Reserve your username" where you are giving your email, username, and password (really signing up with a different header for the form)

"We are stocking the shelves" - pushed the backend of the site for sellers to start adding products without seeing what else is there

Launched with 20 products/sellers and a community that already kind of knew each other from Reddit

This was about a 2 month process bc I had a day job, was working nights/ weekends

Not right now. Bitcoin is too volatile. From talking with other marketplaces that implemented Bitcoin, the % of transactions that come through are very, very small. Most people seem to be holding Bitcoins as an investment strategy (the gold analogy). I think that is true. At this point, we can get a much bigger bang for our engineering buck by working on other features vs implementing/maintaing Bitcoin or a similar digital currency.

Hi there. I have been looking into creating a website my self, and I was just curious as to how you build a user base for something like this? How did you get people to sell on Tindie when it first began?

Good question - you'll need to figure out where your initial users are and tell them what you are doing. Get people in your corner. As you build the site, give them updates, let them sign up before the site is live. If you don't have enough users on day 1, do more to drive more users to the site. Launch only when you have some amount of users (few hundred or maybe a few thousand is the best case scenario). You'll never be ready to launch but definitely give yourself some momentum before opening the doors.

I did this by keeping everyone on /r/Arduino in the loop. As I found a name, a domain, logo, I'd share those updates. Sellers were able to sign up and "stock the shelves" prior to launch which meant once I opened the site for transactions, we had ~20 sellers/ products on the site and orders on day 1.

Thanks! Before moving to SF/Silicon Valley, I was still in school at UNC- Chapel Hill. Got a degree in Political Science. Finished my degree by my soph year, and started taking Entrepreneurship classes. Started a site, Knowble.net, that was a network for researchers to connect across disciplines. Got some money from the school, but ultimately that flopped - ran out of money, paid a firm to build the site (terrible idea), and ultimately had to get a job. Key lessons from that failure:

Learn to do the things you don't know yourself

NEVER outsource development to a 3rd party company

Learn how to code

If you don't know how to code, don't bring on another person that doesn't know how to code

We don't right now and don't have any plans to in the future. Copying answer from another question "Bitcoin is too volatile. From talking with other marketplaces that implemented Bitcoin, the % of transactions that come through are very, very small. Most people seem to be holding Bitcoins as an investment strategy (the gold analogy). I think that is true. At this point, we can get a much bigger bang for our engineering buck by working on other features vs implementing/maintaing Bitcoin or a similar digital currency."

Thanks! A this point it is just closing and collecting checks so the final % will be set in a few weeks once we have a definitive amount closed with this round. However the answer you are looking for is 20%-25%.

You've mentioned a few times how you shouldn't outsource development to a third party. Can you elaborate on this? Why not? What was your experience? What should you do instead if you're a n00b coder (like myself)?

Sure thing - if you hire a 3rd party, you will always have to pay someone else to iterate on the site. There is a 0% chance it will be right on the first shot. Therefore its really an invitation to spend a lot of money down the road - not just the upfront cost you are spending to get your idea made. This is what I did with Knowble - it cost something like $20k+. Please learn from my mistake :)

You'll have to iterate, make changes, learn as you go. If you know how to code, then you can make those changes yourself. You'll do it in the morning/nights/weekends and it will only cost you your time.

If you are a n00b coder, keep going and get better! Jump in, the water is fine!

It is difficult but not impossible. Things to plan for: taxes & attorney fees. You'll want to set up your business correctly if you plan on raising outside investment. If you don't do that right up front, you'll get bit when you fundraise. The legal fees we'll have for this financing round will be over $10k I bet (probably more)

As an aspiring entrepreneur myself, my question is this: what was the process like of getting the company from an idea to something you would be able to pitch to investors?

i.e. how much of a product did you have before seeking funding. How did you fund the project initially? How did you go about finding investors? Did you have to refine or iterate your idea at all in the process?

The site was already live, we had products, orders, traffic. The sales early on were ~doubling month over month. Sure they were small but that seems like a very good sign. As it kept growing, people around me connected me with other people interested in the space. The first investor I got was someone that was in my network already, but I didn't know him. He also invests in early stage companies, understands marketplaces, and believes in the changes we are seeing in the hardware space. From introductory call to email saying, "I'd like to invest" was about 12 - 18 hours.

For this round, that was a much different process. I was out meeting with investors in person, and talking about the site, growth, vision, etc. It was very iterative. The lesson I came away with were:

Spend time/money to get a VERY polished pitch deck

If an investor says "stay in touch, I'm interested" thats a No

Anything but a "Yes" is a No

We didn't have to iterate on the site, but I did iterate on the messaging/how I frame what we are doing depending upon the investor, and how that message was received by the last investor. I was constantly iterating what I said from pitch to pitch.

100% from networking. Friend introducing me to someone else, who says you should talk to X. That person sends the intro, and then schedule a meeting. Cold emails don't get you very far with the top investors who are constantly being bombarded with pitches.

I have a very refined idea for a web/mobile app start up. I have done months of research on the problem/solution I am building but I have no experience designing websites. Thus, I will need to pitch investors to fund development.

What are any tips or resources to get in touch with potential investors?

I had been in SF for 4 years, then moved to Portland after the last company I was at was acquired. I moved back bc missed friends and our head of engineering is in Mountain View too. Made sense from a personal perspective.

Would I move to the valley if I didn't already have a connection to the area? I'm not sure. It is definitely cheaper to live somewhere else. However it is more difficult to get into the community from outside the area. If you live in the the valley, you'll constantly hear about startups/tech and meet people who are part of the scene. It's easier to be a part of the conversation if you are in the area.

I am just now incorporating as of January 1st (LLC) with friends in the tech industry for our first start-up. They are all NASA employees and MIT grads with extensive tech background, but my background is in Public Policy and Regulations development. Are there tools on your website for new start ups in the tech field, or could you offer any recommendations as to navigating pitfalls for someone without extensive tech background?

We can definitely do a better job on that end. Since you all have an engineering background, most likely the biggest problem will come in execution - sourcing manufacturers, parts, work abroad vs a domestic manufacturer. PM me and we can definitely help!

I'd love to hear your thoughts on patents for DIY hardware! Let's say I've got a hardware design idea, but I know it's an evolution of existing technology. How do I go about researching conflicting patents that could prevent me from bringing my idea to market, what steps should I take to differentiate my idea from similar products, and at what point (if any) do I need to see an attorney?

I'm anti-patent. It is a huge time/money suck and ultimately hinders innovation. I'm not the best person to ask on researching your design/idea/ etc but I'd probably just go ahead build it and go for it. Any time you spend looking for conflicting patents, someone else will launch their version and get a leg up.

First of all congrats on the success with your start up and initial funding.
What is the number one thing you would say investors look for in a start up? What helped you achieve success while pitching your ideas?

Depends ultimately on the investor and if they are the lead or a follow on investor. The lead must believe in the space, have some idea of what is going, and therefore be passionate about the opportunity.

Follow on investors might know something about the space, might not. The one thing I didn't realize is how much they just "pile on." Most investors look for a signal by another big name investor, and if they are investing, looks good and they want in! The pile on mentality is alive and well.

Good question - some investors you won't get along with. You'll have different ideas/ look at the world differently/ it just isn't a fit. If that is the case, probably not a good fit as a major investor in your company. The can email you rather frequently - don't want to hate that part of your job...

There are many exciting developments in hobby-level electronics development. First things like Arduino, now affordable ARM processors. In addition to cheap accelerometers, laser cutting for enclosures, 3d printing, etc.

What trends and fads are you seeing that are exciting to you? What kind of products do you think we will see in Tindie next year? Five years from now? Ten?

And, have you bought/used anything offered on Tindie? If so, what was it?

100% agree, and the most exciting part is I don't know. We are just getting started and the projects that pop up constantly excite me. Two examples:

AirPi - Two 17yr olds in London built a shield for Raspberry Pi to turn it into a weather station. Brilliant, cheap product that I never saw coming and has done amazingly. They had to incorporate in the UK, take a loan from their parents, and just shipped hundreds of preorders they got on Tindie.

Tapster - a robot for manual app testing on mobile devices. EVERY mobile app developer in the world should have one bc of the time you'll save.

The only thing I know for certain is we will have tens of thousands of hardware companies emerge over the next few years because it is becoming cheaper to prototype and easier to manufacture in lower volumes. Yes "hardware is hard" but it is getting easier and that only opens the door for more people to come in.

I'm trying to convince some friends of mine to get serious about taking an idea of there's to an angel to see if they (we) could get funding. So my question is, what did you need to take to investors in the form of demos/research/etc. to get them to take you seriously enough to give you your first (and subsequent) rounds of funding?

Build it first. If you get traction on the idea/project, investors will be interested. If it is just an idea, you'll have a very tough time. The only real answer - build it and they will come (if it is a great project and they see potential).

As a maker who is currently in final stages of getting a product ready (ie 2nd round of PCB prototypes) any advice about how I go about getting it ready to sell on tindie? How do I determine a good initial batch size to order, handle shipping, refunds etc?

Good question - once you are ready, you can list it as a Fundraiser (our version of crowfunding which really is just accepting preorders). It has to hit the min # of units sold to 'live' where we bill the orders and you fulfill those ordered. That will give you a good idea of the initial demand. Shipping & handling you'll need to do a little testing on your end bc it depends where you are located & the shipping service you select. Refunds we can handle on our end. You'll just need to tell us which orders to refund. If you have any other questions, feel free to email us at support(at) tindie.com. More than happy to help!

So what's your take on the interest level in hardware overall? Do you think things being sold on the site will continue to increase in complexity? Or will they be limited in scope and cost in the future because people are more interested in the low end of things?

Hey Chris! I think it will gain in complexity - esp as parts come down in price, and manufacturing lower quantities becomes more accessible. The opportunities only get magnified as those two trends accelerate.

I think we will always have low level / low end products, but the sky is the limit - in terms of price point and customers. We already have products that cost pennies to $1k+. We will begin to have more consumerish products - but I think those will fuel growth in hardware. The more interesting products emerge, the more interested people will jump into diy. Very cyclical. Arduino & Raspberry Pi just make that first step so much easier. Gateway hardware drugs

I'm an idea guy; I have new ideas everyday and am actually executing a few of them. My roadblock right now is getting it out there and selling it (to consumers, to investors). I have a new idea that, while the product is different than yours, could rope in every business sector.

I've never built a business model; all of my stuff is from the idea point of view. I get an idea, find out if it's been done, and then make it work.

What can I do to get the word out there and find investors? What kind of cut do you think is fair for investors?

I'm 19 and have no marketable skills beyond being the designated local tech geek. In terms of coding, I could mess around with the variables in JavaScript, but that's about it. Would I have any use in your organization? If not, what would you recommend the first thing I do to set down that path?

Unfortunately not. Get more experienced & become a solid JS developer. Build projects, open the code, get feedback, critiqued by the JS community. You'll have a lot of value as a seasoned JS dev (esp as Node picks up traction)

What are the limitations on what can be sold on your site? I work for a company called Delptronics, and I'm wondering whether we could sell our fully-assembled stomp boxes and eurorack modules on Tindie, or just the kits (since most of the things i'm seeing while browsing seem kit-style).

EDIT: Our modules and stomp boxes are substantially hand built (many of them built by me, actually). Sometimes the resistors and such are put on the boards in a factory, but the electromechanical parts and final assembly are always by hand. I don't know if that's relevant or not, but I mention it because of Etsy's rules.

All of your products look like a great fit! We are very open with what can be sold on the site. We are the first doing what we are doing so it is very much trial and error. If you need any help just PM me!

At this time last year, I forget where we were with users but we had $3600 in sales that month which would be about 100 orders. When talking to early stage investors, it is very much a gamble. The chance of failure much higher, but then again the opportunity is great. I haven't asked them point blank, but I think it ultimately boils down to they have an idea of how the world will work in the future, and you fit in that narrative.